The government is “not ruling out” another Chinese partner for British Steel, the industry minister has said, putting her at odds with Business Secretary Jonathan Reynolds.
Sarah Jones told Sky News breakfast with Anna Jones that for any investment there are “stringent tests that have to be met” and they would apply “to a Chinese company as they would to any other company”.
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It comes after ministers rushed through an emergency bill on Saturday to take over British Steel’s Scunthorpe plant after talks with Chinese owners Jingye broke down, sparking a race against time to keep the furnaces running.
Business Secretary Jonathan Reynolds told Sky News’ Sunday Morning With Trevor Phillips he would not “personally bring a Chinese company into our steel sector” again, describing steel as a “sensitive area” in the UK.
But asked if the government was ruling out the possibility of another Chinese partner, Ms Jones said on Tuesday: “We’re not at the moment.
“I’m not going to say yes or no to anything that isn’t on the table or being looked at.
“Whatever the future for Scunthorpe, we want to make sure we can keep steelmaking in our country and we can grow that industry, not see the continued decline that we’ve had over recent years.”
Jingye stepped in with a deal to buy British Steel’s Scunthorpe plant out of insolvency in 2020, when Boris Johnson was prime minister.
But the company recently cancelled orders for supplies of raw materials needed to keep blast furnaces running at the site – the last in the UK capable of producing virgin steel.
After taking over the Scunthorpe plant on Saturday, ministers have been scrambling to secure the coking coal and iron ore needed to keep it operational.
If the furnaces cool down too much, the molten iron solidifies and blocks the furnaces, making it extremely difficult and expensive to restart them.
‘China on a mission for dominance’
Former Conservative defence minister Tobias Ellwood said the row shows China should be removed “from any dealings with the UK’s national infrastructure”.
“We are dealing with a superpower on a mission, a country that does not play by the rules that has long sought dominance in the critical supply chain”, he told Sky News.
However, the Chinese embassy has urged the British government not to “politicise” the situation by “linking it to security issues”, saying it is “an objective fact that British steel companies have generally encountered difficulties in recent years”.
Ms Jones later told LBC that China was the UK’s fourth-biggest trading partner, creating thousands of jobs that people rely on, so a “pragmatic relationship is needed”.
Mr Reynolds previously said that rather than avoiding future deals with China, there should be a “high trust bar” for companies to be involved in the British economy.
Raw materials to arrive today
The business secretary will today will visit the port near the Scunthorpe plant as supplies from two ships are unloaded and transported to it.
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However, while the materials have been supplied, the government still needs to decide the next steps to secure British Steel’s long-term future, whether that be full nationalisation or private sector investment.
Ms Jones said that the government had offered Jingeye money in return for investment and “we think that there is a model there that we could replicate with another private sector company”.
But she said there “isn’t another private sector company there waiting in the wings” currently, and that it may be a “national solution” is needed.
She said “all of the options” were expensive but that it would have cost more to the taxpayer to allow the site to shut.
A YouGov poll shows the majority of the public (61%) support the government’s decision to nationalise British Steel.
The Conservatives have accused the government of acting “too late” and implementing a “botched nationalisation” after ignoring warnings about the risk to the steelworks.
